Bloomberg News

ESPN Lights Up New TV Studio for Screen-Obsessed Viewers

May 22, 2014

ESPN’s new “SportsCenter” studio, which goes live next month, will have two things viewers can’t seem to get enough of: sports and screens.

Anchors, including Scott Van Pelt and Hannah Storm, will present the latest sports news with 114 video displays beside them, behind them, even under their feet. They’ll use tablets to call up highlights and drop and drag images on monitors. Viewer responses to polls on Twitter will pop up in real time.

The facility in Bristol, Connecticut, marks an effort by Walt Disney Co. (DIS:US)’s sports network to merge the TV and mobile entertainment worlds and keep its dominance in the 24-hour sports TV business ESPN invented in 1979. Sports fans already use big-screen TVs, smartphones and social media, and ESPN needs to as well, said Rob King, senior vice president for news.

“We want to show that’s where we live, too,” King said in an interview.

“SportsCenter,” the news and highlights show that airs for about 20 hours a day on multiple channels, was the program that introduced ESPN to pay-TV audiences 35 years ago.

The 10,000 square-foot (929 square-meter) studio, officially called Digital Center 2, features an open floor plan designed to let hosts and guests move around freely, and let viewers see them watch highlights as if they were with friends, King said.

“The studio places the talent more at the center of things,” King said.

Holographic Image

Digital Center 2 lets anchors show off features that fans can use online, such as “hot and cold zone” boxes that display a baseball player’s strengths and weaknesses based on hitting stats. ESPN is also working on holographic imaging technology for its hosts, an effort dubbed Project Jarvis after the system Robert Downey Jr. used to assemble his armor in “Iron Man,” King said, without elaborating.

The network presented the new studio to reporters at an event today.

ESPN, billed as part of a cable package, commands the highest price of any ad-supported channel at about $5.54 a month per subscriber, according to SNL Kagan. It’s the biggest piece of Disney’s TV division, which produced 64 percent of last year’s $10.7 billion operating profit.

While Disney’s sports network remains in a sweet spot, it can’t stand still. U.S. pay TV households have peaked, and primetime viewers at ESPN this season fell 2 percent to 1.08 million in the 18-to-49-year-old demographic most coveted by advertisers, according to Nielsen.

Visual Dazzle

In addition, Comcast Corp. (CMCSA:US)’s NBC, 21st Century Fox Inc. and CBS Corp. (CBS:US) all now operate 24-hour sports cable channels.

“It’s an increasingly competitive landscape, with more sports networks, more hours on the air and new platforms,” said Tom McGovern, managing director of New York-based Optimum Sports, which buys media time for Dick’s Sporting Goods Inc. (DKS:US) and State Farm Mutual Automobile Insurance Co. “They’ve got to get smart and creative.”

Behind the visual dazzle of the new studio, ESPN is making a more aggressive play for online viewers and advertisers, alongside its conventional pay-TV. The network has found viewers who access its shows on multiple devices spend three times as many hours with its content than those who watch TV alone.

Coffee Cups

Craig Bengtson, vice president for news, said at today’s event in Bristol that “SportsCenter” now has 10 employees dedicated to social media, up from one a year ago.

“The revenue we are driving is significant and it was a zero not long ago,” he said.

Advertisers are allocating more of their budgets to digital. Dunkin’ Brands Group Inc. (DNKN:US), parent of the donut chain, has been spending a larger share of its $360 million annual marketing online, according to John Costello, the company’s president of global marketing and innovation.

A Dunkin’ Donuts’ season-long sponsorship with ESPN’s “Monday Night Football,” in which plays are re-enacted with cartoon coffee cups in place of the athletes, has been viewed more than 70 million times since September on Vine, the video-sharing website, according to Costello.

“Omni-channel is more important now than at any time in my career,” Costello said in a telephone interview. “We’re in the early stages of exploring the use of that.”

Costello said he anticipates new sponsorship deals will arise with ESPN’s new studio.

A growing part of the network’s strategy is video clips.

ESPN has a “Department of Highlights” with about 30 staff members who produce short videos for multiple platforms. The network published more than 30,000 clips last year that were seen over 2.5 billion times.

Sports fans can’t get enough innovation, according to Brad Adgate, senior vice president of research at Horizon Media Inc. They were early adopters of high-definition TV and are now embracing mobile applications.

“That is where a lot of young viewers are migrating,” he said.

To contact the reporter on this story: Christopher Palmeri in Los Angeles at cpalmeri1@bloomberg.net

To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net Ben Livesey, John Lear


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